In 2005 bread cost 100 per loaf milk cost 150 per

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Unformatted text preview:           7 P artIII:ShortAnswer(40pointstotal)   31.(8points)Some people have suggested that raising the minimum wage will help the working poor of the U.S. Others have argued that it actually hurts those; its purports to help. Suppose the supply and demand for labor are given by the following two equations, respectively: LS = 40W, LD = 240 – 20W, where LS is the quantity of labor supplied and LD is the quantity of labor demanded (L is in millions of persons employed each year), and W is the wage rate (in dollars per hour.) (a) What is the competitive-market wage rate and employment level? Graph your solution (place L on the X-axis and W on the Y-axis, remember to change the equations to the right forms before graphing) (b) Suppose the government sets the minimum wage rate of $5. How many people are employed and unemployed? Show this on your graph of part a. See notes for answers (we discussed about this in class) (c) Explain how some people benefit from the minimum wage program yet others are har...
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This document was uploaded on 03/13/2014 for the course ECO 221 at Miami University.

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